There is a growing movement of consumers demanding information on how their food is produced, including affluent American consumers, millennials, and the European market. I recently returned from a trip to Austria where food traceability was a hot industry topic because many Europeans were passionate about supporting local farmers and wanted labeling identifying which region (and even which farm) produced their food.
Millennials especially care about where their food comes from. They are more interested in having a relationship with their food – tracing it back through the supply chain to its origins, knowing what processes it went through, and having information necessary to make an informed decision about what they are consuming and which companies they support with their hard-earned dollars.
A recent study on millennials by the Pew Research Center reports this generation is less trusting than older Americans – with just 19 percent saying that most people can be trusted, compared to 31 percent of Gen Xers and 40 percent of baby boomers. That more cautious attitude can also extend to brands.
Americans in general have grown uneasy with large systems that they don’t understand. You can see this unease in the increased use of the terms “big government,” “big pharma,” and “big agra.”
These large systems evolved as populations exploded and technology advanced during the last century. These “big” systems serve larger populations using fewer resources than ever before and are necessary for a modern society.
However, these systems are so big and so complex that it is impossible for anyone on the outside to fully view and understand how the entire system functions. This lack of understanding leads to mistrust. Mistrust of large systems is part of what is driving the latest push by millennials and affluent consumers for more labels on food from manufacturers. They have higher standards for safety, processing, labeling and the traceability of food than ever before. More millennials are interested in cooking their own meals. They are more apt to visit farmers markets or grow their own herbs and vegetables.
With this feeling of mistrust permeating the market, how can global food manufacturers build trust and brand loyalty amongst these growing, affluent consumer groups?
In response to consumer pressure, companies are learning the importance of traceability and seeking ways to communicate with customers about their relationships with suppliers and the ingredients included in their products. Those that are proactively seeking these solutions will be best positioned to build market share among these consumer groups.
Imagine the following scenario: A shopper is walking through the store picking up supplies for a weekend barbecue. Through his phone mobile app, he follows all of his favorite brands so he can get alerts for special weekend deals as he shops. His phone vibrates with an updated alert. The manufacturing company that produces his favorite brand of organic bratwurst just issued a recall. He worries that the package of brats in his cart might be affected. He pulls out his phone and scans the bar code. He’s immediately directed to the company’s website.
According to the product code, the shopper discovers that his package of brats is affected by the recall. With concerns of possible contamination, he clicks on a video link where the CEO explains that the company had switched suppliers and failed to update the label. The shopper also learned from the video that some of the seasonings were produced in a factory that also processed nuts, and therefore, posed a risk for individuals with peanut allergies. The CEO apologized for the inconvenience and offered a digital coupon for a free package of brats.
The shopper downloads the coupon to his mobile phone app. Since he and his family have no allergies, he continues purchasing the same brand. He’s so excited about the great deal, he grabs another package and posts an invite to his barbecue to his friends on Facebook with a link to the company’s website.
This future scenario isn’t far away. Companies have been experimenting with web portals offering consumers production and traceability data for a decade, and many are actively implementing technology to link up their supply chain in a way that will eventually provide retail customers and end consumers real-time access to their products’ traceability data through retail portals and mobile applications. Many companies are already using QR codes on their products to link directly to a company’s website, promotional offers, or interactive content from a mobile device. (My personal favorite is the QR code featured on Heinz ketchup bottles that link to Trivial Pursuit and other table games. Those games are a lifesaver when waiting for a meal with a table full of hungry kids. Thank you, Heinz!)
This is the first step of building your brand’s interactive presence. But building a trusting relationship with your brand’s consumers takes a lot more planning and investment in technology that can provide you and your customers with real-time data and product traceability.
This new generation of consumers has grown accustomed to having endless amounts of data at their fingertips, and will gravitate toward brands that provide the open transparency they crave. Additionally, they are more likely to publicly advocate for their favorite brands on social media.
One example of how a company used traceability and real-time data to protect its market share is Banvit’s response to a bird flu outbreak in Turkey that affected many poultry producers. Thankfully, Banvit’s products didn’t contain meat sourced from any of the affected suppliers. However, the outbreak was front-page news, and the company had to convince consumers that their product was safe.
Banvit was lucky. The company had been making heavy investments in modernizing their plants for nearly a decade. The management team already had access to real-time production data via executive dashboards and scoreboards installed by CAT Squared, a U.S. company that develops manufacturing execution systems for the food industry. All Banvit and CAT Squared needed to do was create a public portal so this data could be accessed via the company’s website.
In less than a month, Banvit embarked on an extensive marketing campaign, explaining how their systems allowed them to achieve complete product traceability, proving that their birds were not sourced from the affected suppliers. Banvit’s customers could buy a tray of chicken, type the serial number from the tray into a field on Banvit’s website, and view a complete genealogy report that tracked the product back to the broiler’s farm, flock, and breeder. This groundbreaking approach allowed Banvit to stand apart from the competition.
Banvit’s response to the avian flu crisis was swift, but this action never would have been possible without the company’s previous investments to integrate their data-collection systems. Now, companies are moving beyond just integrating the systems within their plants. The emergence of blockchain technology promises full integration of a product’s value chain as well as complete transparency of data tracked across the blockchain. The full implications of what this level of transparency will mean to manufacturers, retailers, and consumers are not yet known. But a future where consumers have real-time access to traceability data on their products may be on the horizon.